Challenging child care issue calls for creative solutions

Grant money from the American Rescue Plan Act is about to run out, and some day care centers are facing a financial cliff.

The construction company R and R Northwest in Hayden has been working to bridge its 14 employees' needs for day care with day care centers' need for support.

“At our last company barbecue, I just started walking around and saying, 'what matters to you guys?'” R and R office manager Ashton Underdahl said. “What would make this a happy, healthy workplace? There were two answers that came back: food and child care.”

Underdahl built an employee benefit program giving day care access to their employees, inspired by data and pilot programs tested by United Way North Idaho.

A board member with Discovery Christian Day School, Underdahl developed a plan with the school and day care center. The center would guarantee spots to R and R workers for children, and R and R would pay part of the employee’s cost for child care and the balance of unused spots at the end of the year.

“No 1. we offer walk-in child care to our workers,” Underdahl said. “And No. 2, it guarantees tuition to the day care center.”

R and R child care days are like sick days. Each worker gets five days per quarter to use how they want. Workers pay the day care center $17, R and R Northwest pays $8, and workers are guaranteed a space when they need it.

Parents can use the time however they want, Underdahl said, whether children are sick, they want to make a grocery trip or take a pilates class.

The result has been that R and R employees have not missed work due to lack of child care, she said.

The program has been one small solution to a larger community problem of a lack of availability of child care.

“The grant funding has been helpful in initiating programs, but the responsibility will fall on companies to find solutions,” Underdahl said. “If they want workers, they have to help solve this problem.”

ARPA grants support businesses in the aftermath of COVID-19 with things like supplemental wages for day care workers.

“Providers have known these grants were going to end,” United Way Community Impact Director Keri Cederquist said. “It’s crisis funding. We’re facing closures. Day care centers propped up by ARPA funding will struggle to stay afloat as grants end.”

United Way of North Idaho received $500,000 in ARPA money to distribute to families for access to day care, which will expire Sept. 30. The program funded child care scholarships for 300 families in the Panhandle.

But the scholarships were designed to create a model, using data, that local businesses could follow to retain employees or cover child care. Now United Way provides strategies for companies to create their own programs, like employer-supported child care, employee scholarship funds, child care consortiums or backup child care options like R and R’s day care benefit.

United Way promotes employer-funded scholarships as the most versatile solution and can provide guidance for tailoring or scaling the program.

“We designed it with the intent for it to be a turnkey product,” Cederquist said. “Local communities are best suited to solve local issues.”

Child care can help employees to address their biggest problems of employee retention, she added.

Large or small businesses can find a tested model, or get support to create one at uwnorthidaho.org/workforce-child-care-benefits.

Large employers like Kootenai Health have an in-house day care center for their workers. Smaller employers like Shoshone Medical have a contract with a local day care provider.

“Bigger companies can do this better than us,” Underdahl said. “This is what we have to work with, and it’s an experiment, frankly. I hope this coverage will help bigger businesses make wise decisions. Because it’s a fraction of their charitable contribution budget.”

R and R’s program is tax deductible because the Discovery Christian Day School is a nonprofit, and other companies could benefit from similar tax deductions or credits by initiating a United Way program.

For businesses that are already feeling overwhelmed, Cederquist also recommends tackling low-hanging fruit.

"The first solution could be just talking about access to child care — businesses discussing options with employees,” she said. That can include referring employees to IdahoSTARS, which provides families referrals or support for child care. Just educating employees on what benefits are available, like assistance and tax deductions, can be a huge help to parents.

More ambitious investors could apply for grants for shovel-ready projects. They can build day care centers to meet demand and yield returns over time.

“Employers in our region do have a strong sense of caring for their community,” Cederquist said. “I have not yet heard a flat no when marketing to employers. But it’s a shift from thinking about family care as a private issue to a community issue.”

Day care is a complex market that falls outside normal supply and demand, Cederquist said. The industry is understaffed and has too few openings to meet demand, but wages can’t increase without shutting out the mid- to low-income parents.

From 2019 to 2023, the median wage for a child care worker only rose to $11.80 per hour, Cederquist said.

“Through COVID-19 we were able to see what happens when we invest in early care,” she continued. “What the data tells us is what will help and who benefits.”

Of the 300 families who received scholarships, 67% were single parents. The average age was 33, and the average monthly income was about $3,022 per month. Average monthly child care costs were $700 on average.

“Without the scholarship program, these families are going to face a financial crisis,” Cederquist said. “And businesses aren’t aware of how that’s going to impact their workforce.”

But local businesses can address the impending problem with tested initiatives.

“One of the most painful things that I have observed with parents is them internalizing the systemic fractures as their personal failing,” Cederquist said. “What I always tell them is ‘it’s enough. You are enough. It’s that the system is not designed for you.’ It’s designed for the 1970s.”